Earthquake Court Approach Misguided

Lawyers will be the only
winners from the Labour Party’s decision to set up an
Earthquake Court that would be funded by everyone who takes
out insurance in New Zealand and potentially Cantabrians may
have to wait even longer to have claims resolved, the
Insurance Council Chief Executive Tim Grafton said
today.

“The idea of creating a situation where
effectively you are forced by the State to pay people to sue
you is totally rejected and would set a very bad precedent
for the future.” Mr Grafton said.

“The supposed
justification for this misguided policy is Labour’s
statement that 10,000 insurance claims have not been
settled. The reality is that 87% of the 22,500 over cap
claims with insurers have been settled or agreement reached
with the customer, there is only a very small fraction of
claims that may be in dispute,” says Mr
Grafton.

“About 1,500 customers have still to make
decisions on the offers made by insurers but the majority
are waiting for their land settlement offers from EQC before
deciding, very few are in actual dispute.

“Where there
is a dispute there are free services available to people to
resolve maters without having to go to Court. First, there
is the internal disputes resolution service with the
insurer, next there are the external, registered disputes
resolution services and in addition to this there is the
Residential Advisory Service that insurers help fund,” he
says.

“We would encourage people to use the independent
services such as the Residential Advisory Service because in
many cases the disputes are not legal issues but technical
matters relating to differences about engineering
assessments of damage,” he says.

“Clearly the current
resolution procedures available are working because at the
end of December 2013 there were 2,600 customers with
undecided claims but by the end of March 2014 the number had
reduced to 1,500 with a further 1,100 customers agreeing to
a resolution with their insurer or claims management
company,” says Mr Grafton.

“Where matters have gone to
court, there are about 175 active earthquake cases before
the High Court of which about 70% have been brought by one
lawyer Grant Shand.

“Encouraging people to go to Court
by making it free means people may abandon the already free
disputes resolution services regardless of the merits of
their case to the uncertain outcome of the Courts. This
would put a halt to the customer’s recovery progress until
the Court has determined their cases.

“Many customers
just want to get on with their repairs and rebuilds but this
misguided policy may create some confusion and further delay
resolution as some may think they’ll await the outcome of
the election to see whether some State-sanctioned court
action may result in a future windfall,” says Mr
Grafton.

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